EUR/USD Forecast: Holding On To Its Bearish Bias Despite Bouncing From Daily Lows

EUR/USD Current Price: 1.1860

• US to publish the August Nonfarm Payroll report this Friday.
• Services output in the EU weaker than initially estimated, according to Markit.
• EUR/USD is holding on to its bearish bias despite bouncing from daily lows.

The EUR/USD pair slid to a fresh weekly low of 1.1788 as the dollar remained king appreciating against most major rivals. The pair, however, bounced from the mentioned level, trimming daily losses d and reaching fresh highs in the 1.1860 price zone, despite generally upbeat US employment-related data and plummeting equities. The US published Initial Jobless Claims for the week ended August 28, which shrank to 881K, better than the 950K expected, also second-quarter productivity rose 10.1%. August Challenger Job Cuts decreased to 115.762K,  while the final ISM Services PMI for the same month printed  55 from 54.8 in the previous month. On a negative note, the trade deficit widened to $63.6B in July.

Earlier in the day, Markit released the final versions of the Services PMIs for the Union, with the indexes for Italy and Spain revised lower, back in contraction territory. However, the German index was upwardly revised to 52.5 from 50.8. The final EU figure was also better than initially estimated, revised from 50.1 to 50.5. Meanwhile, EU Retail Sales were down 1.3% MoM in July and up by 0.4% when compared to a year earlier, missing the market’s expectations.

This Friday, the US will publish the Nonfarm Payroll report. The country is expected to have recovered another 1.4 million jobs in August, after adding 1.76 million in July. The unemployment rate is expected to tick down to 9.8% from the latest 10.25, while the participation rate is seen steady at 61.4%

EUR/USD Short-Term Technical Outlook

The EUR/USD pair hovers around its daily high, up at the end of the American session. The 4-hour chart shows that it has held below its 20 and 100 SMA, with the shortest one gaining bearish strength. Technical indicators have bounced just modestly after reaching oversold readings, losing holding well below their midlines. Overall, the risk remains skewed to the downside, with a relevant support level at 1.1760.  

Support levels: 1.1810 1.1760 1.1710

Resistance levels: 1.1890 1.1940 1.2000

View Live Chart for the EUR/USD

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